A Review of the 2012 Economy

The 2012 U.S. economy can be characterized as moderate at best, but there were solid signs of new growth, from jobs to home sales to manufacturing. Here’s a snapshot of how some facets of the economy performed in 2012.

The Unemployment Rate

Non-farm unemployment decreased from 8.3% in January to 7.7% by November, the lowest unemployment rate since the end of 2008. (Source: Bureau of Labor Statistics)

Manufacturing

Economic activity in manufacturing expanded eight out of 12 months in 2012; expansion was classified mostly as “moderate.” (Source: Institute for Supply Management)

Gross Domestic Product

The U.S. GDP grew at a 3.1% annual rate in the third quarter of 2012, mainly driven by a rebound in inventory investment. (Source: Bureau of Economic Analysis)

Interest Rates

The Federal Reserve maintained low interest rates throughout 2012 due to high unemployment and a sluggish economy. The 30-year fixed-rated mortgage maintained a near-record-low average of 3.35% in December 2012, while fixed-rate 15-year mortgages averaged 2.69%. (Sources: Federal ReserveFreddie Mac)

The Housing Market

The total U.S. for-sale inventory of single-family homes, condos, townhomes and co-ops remained at historic lows, with 1.76 million units for sale in October 2012, down -17% compared to a year ago. The median list price in October was $189,900, the same as a year ago. The median age of inventory was down -11.81% compared to one year ago. (Source: Realtor.com)

Foreclosures

U.S. foreclosure starts dropped to a 71-month low in November, but bank repossessions increased annually for the first time since October 2010. (Source: RealtyTrac U.S. Foreclosure Market Report)